iPhone, FLO Could Change Mobile TV Outlook

Could the iPhone change the outlook for mobile television from dicey to popular? Qualcomm Inc. certainly hopes so. Last week at CES it unveiled an accessory that will enable its FLO TV service on the iPhone and iPod Touch.

Specifically, the accessory is a FLO-enabling version of the Mophie Juice Pack, an existing iPhone add-on for boosting battery power. It’s a slim slipcover that will allow the iPhone and iPod Touch to get FLO TV signals, while doubling the devices’ battery power. The battery boost is key for uptake; the iPhone is notorious for its short battery life when using data and video services.

The iPhone integration could be just the shot in the arm that FLO needs. Qualcomm built out the FLO TV overlay network in North America specifically for delivering mobile television without worries of bottlenecking or congestion issues. Carriers like AT&T Inc, sell the service as an add-on to their existing packages, for around $10 per month, typically. The rub is that FLO TV can only be picked up by devices that have a special compatible chip – and there aren’t that many available, which has been an impediment to FLO’s mass market success.

“FLO TV and its devices are prohibitively expensive, especially when compared with free ATSC M/H content,” said Steve Smith, researcher at the Coda Research Consultancy.

Mobile television in the United States boils down to two standards: FLO, and the mobile version of the ATSC standard that U.S. broadcasters already use for in-home digital television. The government is behind ATSC, largely because broadcasters can adopt it easily for mobile, using existing equipment. ATSC focuses on local content and is free of charge. And it is the ATSC standard that’s behind Sprint-Nextel’s Samsung Moment DTV capability, also announced at CES.

FLO, on the other hand, offers specially created content packages Qualcomm has created it by working with media companies. National content and hit shows that might not be carried by local affiliates are FLO’s biggest differentiator from ATSC.

“Competition between mobile phone manufacturers will drive down costs of ATSC M/H devices and provide a wider variety of devices for users,” said Smith. Coda has found that Americans accessing video content via their mobile phones will climb to 74 million in 2015. Out of that, ATSC-based users will reach 18 million by 2015.

The emergence of the iPhone as a FLO device could change that dynamic. Smith acknowledges the importance that smartphones will have for mobile video take-up: U.S. ownership, he said, will rise to 132 million in 2015. By then, smartphones will account for 64 percent of all mobile phone sales. The popularity of video services will hinge on changing consumer habits – something the iPhone has proven to be quite good at. And that could in turn be good for FLO.

“Viewing video on small devices out of home is new,” said Smith. “It’s different from cameras and MP3 players on phones because people were already taking photos and listening to music on other devices whilst out and about. Nevertheless, mobile phones are things people always carry with them and use for a variety of activities – texting, social networking, mobile Web and so on. The challenge for service providers is to create the kinds of services people want and to help people make the transition from what they are currently doing on their phones to something entirely new.”

The iPhone announcement has been in the works for some time; Qualcomm demoed a large (and therefore non-compelling) prototype receiver for the iPhone last spring. The companies then announced in April of 2009 that they were working on bringing FLO TV to the iPhone in a more elegant way, and eventually Qualcomm last November showed off a proof of concept for a much smaller receiver that would give the iPhone and iPod touch FLO TV reception.

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